Parties plot their strategies for budget cuts

Article by: JONATHAN WEISMAN

New York Times

February 6, 2013 - 11:00 PM

WASHINGTON - Congressional Democrats, sensing a shift in political momentum, said Wednesday that they were closing in on legislation to temporarily head off deep across-the-board spending cuts, convinced that once federal furloughs and layoffs begin next month, political pressure on Republicans to accept more tax increases will become irresistible.

At a retreat in Annapolis, Md., this week, Senate Democratic leaders urged the party to stand its ground in the battle over nearly $1 trillion in military and domestic cuts over 10 years, set to begin March 1. Democrats want a reprieve from those cuts, financed by a mix of spending cuts and tax loophole closings that they believe will rally public support.

Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee, said, "Republicans ultimately have to choose whether they are more interested in protecting tax breaks for Big Oil and other special interests, or protecting defense spending and the economy."

'It's time to act'

Republican leaders are no less firm that the cuts -- known as sequestration -- will come into force in three weeks unless Democrats agree to equivalent spending cuts elsewhere in the budget, without tax increases.

"At some point, Washington has to deal with its spending problem," Speaker John Boehner said. "Now I've watched them kick this can down the road for 22 years since I've been here. I've had enough of it. It's time to act."

With the clock ticking, both parties are showing some cracks in their resolve. Some Republicans with large military installations in their districts said they could support a postponement in the military cuts while talks continued on a broader deficit reduction plan.

The Republican leaders of the Senate and House Armed Services committees proposed Wednesday to cancel the military cuts for 2013 by roping off savings from a 10 percent cut in the federal workforce over the next decade. Rep. Howard McKeon, the chairman of the House Armed Services Committee, met Tuesday with the commandant of the Marine Corps, Gen. James Amos, who told him that he could maintain Marine Corps readiness this year, but that training and equipping Marines would drop off sharply in 2014 if the cuts went forward.

Bill expected before recess

House Democrats produced legislation that would stave off the cuts through Sept. 30 by ending direct subsidy payments to agriculture businesses, eliminating tax breaks for oil and gas companies, and establishing a minimum 30 percent effective tax rate on annual income of more than $1 million. Senate Democrats hope to produce a similar plan by the end of next week, aides said.

Senate Democrats hope that they will have a bill before the weeklong Presidents Day break, which begins Feb. 18. That means the Senate would have just four days to pass it before the deadline. But, aides say, the real test will come weeks later, when military contractors and agencies begin sending out notices of layoffs and unpaid furloughs. At that point, Democrats insist that Republicans will have to relent.